Find the expected cash flow from each apartment complex

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Reference no: EM131552295

Mr. Sam Golff desires to invest a portion of his assets in rental property. He has narrowed his choices down to two apartment complexes, Palmer Heights and Crenshaw Village. After conferring with the present owners, Mr. Golff has developed the following estimates of the cash flows for these properties.

Palmer heights Crenshaw Village

Yearly Aftertax Yearly Aftertax

Cash inflow Cash inflow

(in thousands) Probability (In thousands) Probability

$70 0.2 $75 0.2

$75 0.2 $80 0.3

$90 0.2 $90 0.4

$105 0.2 $100 0.1

$110 0.2

a. Find the expected cash flow from each apartment complex.

b. What is the coefficient of variation for each apartment complex?

c. Which apartment complex has more risk?

Reference no: EM131552295

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